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Bajaj Corp to groom personal care segment with new launches

Viveat Susan Pinto / Mumbai 27 Jul 16 | 01:46 PM

Kushagra Bajaj-led Bajaj Corp, the leader in the light hair oil market with brands such as Bajaj Almond Drops, will step up focus in the personal care category with new launches this year.

The move comes as the larger hair oil category, which gives Bajaj Corp bulk of its revenue, continues to see slowdown pressures as rural and urban growth remain tepid.

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In the June 2016 quarter, rural volume growth in hair oils as a market declined to levels of 1% from 4% in the March quarter, Sumit Malhotra, MD, Bajaj Corp said.

This impacted the company whose overall volume growth (led by hair oils) came at 0.8% only for the June quarter versus 12% a year ago.

Urban volume growth for the market as well as the company has been weak for nine quarters now, sector analysts said. Scope for recovery is possible later this year, Malhotra said.

"The monsoon impact on farm incomes will only show later this year once the harvest is done. The Seventh Pay Commission impact will also show up with a lag," Malhotra said. "So realistically speaking, we see a recovery (in the market) in the fourth quarter," he said.

Personal care led by Nomarks, while contributing to 3% of Bajaj Corp's topline, saw a 27% growth in sales volume in the June 2016 quarter. On a year-on-year basis though, overall sales growth for Nomarks was down 16% as pricing power remained muted.

With input prices steadily advancing though, Malhotra says the coming quarters would see companies recalibrate their pricing strategy. "It  would be a careful  balance  of  the two (price and volume)," Malhotra said. "I don't think companies can take their eyes off sales volume despite pricing power making a comeback," he said.

Bajaj Corp had acquired Nomarks cream from Ozone Ayurvedics three years ago in a bid to expand into other areas. It has since extended the brand into soaps, an exfoliating scrub and facewash. While Malhotra declined to specify what the new launches would be, further extensions of Nomarks could not be ruled out, analysts tracking the market said.

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